Closing Gold & Silver Market Report – 8/4/2011
August 4, 2011STOCKS PLUMMET IN MASSIVE MARKET CORRECTION RECESSION FEARS GROW
In what is being called a “full-fledged correction,” stocks plummeted today as a stock market selloff the likes of which hasn’t been seen since the recession in 2009 took place. Investor fears about both the possibility of an imminent recession and the ongoing debt crisis in Europe resulted in a 4.31% drop in the Dow, a 4.78% drop in the S& P 500, a NASDAQ drop of 5.08%. One market strategist with Lord Abbett Co. said about the selloff, “People are throwing in the towel because they can't find relief on any front.”
Speaking of recession fears, economists at Bank of America Merrill Lynch are warning that the soon-to-come loss of unemployment benefits for approximately 3.71 million people in this country will add to the economy’s slowdown and push the U.S. closer to a recession. According to the bank, the people known as the “99ers,” who have exceeded normal unemployment benefits and are currently receiving benefits through an emergency 99-week extension, are unlikely to receive another extension in the current political climate. In a note to clients, economist Josh Dennerlein stated, " This will act as a hit to income, hurting consumption growth in the first half of the year."
In accordance with its role as a financial safe haven, the price of gold dipped today as investors hit by the drastic stock market tumble relied on selling the precious metal in order to cover their other market obligations. Trader Matt Zeman with Kingsview Financial said, “The selling got so hard in equities and other markets that people are being forced to cover positions and meet margin calls.”
At 5:00 pm (CT), the APMEX precious metals spot prices were:
· Gold - $ 1,650.40 - Down $14.90
· Silver - $38.96 - Down $2.86